2013 (11) TMI 1072 - AT - Service Tax

Stay application - GTA Service - Reverse Charge mechanism - Held that - Following decision of assessee s own case 2010 (1) TMI 145 - CESTAT, MUMBAI where Tribunal has dropped penalty and held that applicant was rightly under bona fide belief that the impugned activity was not leviable to service tax. In view of that the applicant has made out a prima facie case for waiver of entire amount of penalty - Waiver of pre deposit granted to assessee.

Summary

Issues:
Dispute on payment of tax on GTA service under reverse charge mechanism for the period January 2005 to March 2006. Application for waiver of pre-deposit of penalty of Rs.6,21,600.

Analysis:
The judgment by the Appellate Tribunal CESTAT Chennai involved a dispute regarding the payment of tax on GTA service under the reverse charge mechanism for a specific period. The applicant sought a waiver of the pre-deposit penalty amounting to Rs.6,21,600. The Tribunal considered the arguments presented by both sides and examined the records related to the case.

The dispute arose when the applicant paid the service tax after receiving a communication from the Ministry of Finance to the Ministry of Petroleum. Subsequently, a show-cause notice was issued proposing a demand for interest and imposition of penalty. The Commissioner confirmed the demand of interest and penalty. The applicant, however, pointed out that in a previous case involving the same issue, the Tribunal had set aside the penalty, indicating a bona fide belief on the part of the applicant.

The learned counsel for the applicant argued that the Tribunal had previously dropped the penalty in a similar situation, emphasizing the applicant's genuine belief that the activity was not subject to service tax. On this basis, the Tribunal found that the applicant had established a prima facie case for the waiver of the entire penalty amount. Consequently, the Tribunal granted the waiver of pre-deposit of penalty and stayed its recovery during the pendency of the appeal.

In conclusion, the judgment by the Appellate Tribunal CESTAT Chennai resolved the issue by granting the applicant's request for the waiver of the penalty amount, considering the precedent set in the applicant's own case and the bona fide belief demonstrated by the applicant regarding the applicability of service tax on the disputed activity.